mobilestance 2009 mobile predictions sm2Peer into Mobilestance’s Proprietary Crystal Ball!

Well it’s that time of year again… when pundits and publishers large and small exploit the slow end-of-year news cycle to recap the old and forecast the new.  Here at mobilestance it’s a extra-special time of year… as it was nearly one year ago when we formally “came out” of beta with our 2007 Recap piece and spammed it out to our publisher’s 3,000 +  email address book.  Ahh… memories!

This year, rather than spend the next thousand words rehashing what was undoubtedly the most exciting year in mobile since the advent of the crazy frog ringtone, we decided instead to take the easy way out and peer ahead to future…   casting our lot into a sea of like-minded posts from across the blogosphere.

So what will occur in 2009 at the intersection of Mobile and Marketing?  Will location become (as Dan @ Organic so eloquently put it in a recent Facebook status) “just another input”?  Will MMS finally become interoperable between carriers and ShortCodes, and finally emerge as a realistic marketing vehicle?  Will a wave of consolidation sweep the industry, as smaller independent mobile agencies, technology vendors and ad networks become casualties of the “great recession”?   Will newly legislated digital privacy-controls arrive just in time to kill the mobile web?  And of course the big question on everyone’s minds: Will mobile finally jump from the backwater of marketing budgets known as “emerging,” grow some legs, ditch the tail, and finally walk upon solid (budgetary) ground?

So read on then, fearless time shifters… and arm yourself for the ensuing complexities that will envelope our fledgling industry in the coming year!

Mobilestance’s Top 10 Mobile Marketing Predictions for 2009

  1. 2009 Will be the Year of Mobile.   After many false starts the Long Joke will finally end… and Mobile will finally have its moment in the sun.  With the rising popularity of smartphones; the lower cost of mobile data; and the pervasiveness of mobile broadband, internet and other “beyond voice” services, Mobile (with a capital “M”) will finally achieve critical mass in the US – and agencies, brands and business infrastructure providers alike will finally start paying attention with the purse strings.
  2. 2009 Won’t be the Year of Mobile.  What would a mobile marketing prognostication piece be without some conflicting signals?  Call it hedging my bets… but I just couldn’t resist punching up the contradiction that is the current state of mobile marketing.   Sure, everything I said in the previous ‘graph is dead on… the crystal ball is crystal clear on that.  But will that make 2009 “The Year of Mobile?” Hardly.  Sure, mobile has made some great strides of late in terms of its effectiveness as a marketing channel, and there is NO doubt that will come even farther, faster in 2009.  But sorry kids, it simply will not find its way out of the “emerging” bucket when it comes to budgeting.  No, the “Year of Mobile” can only be declared after we see dedicated “mobile” advertising, CRM and/or marketing budgets… or (at a minimum) a substantive breakout from a larger “digital” line… and with 2009 shaping up to the second coming of the “Flight to ROI” of 2002 (warning: pdf link) , we’ve probably got until 2010 until we can finally herald the end of the Long Joke. In the meantime there’s still plenty for Mobile Marketers to do – namely, hone our skills and prepare ourselves for when the money spigot really opens up in 2010.
  3. Mobile Search Comes of Age.   OK, enough with the levity… let’s get into some serious forecasting. If there’s one thing we’ve learned about mobile usage in ’08, it’s that smartphones = search volume.  While previously a mere academic curiosity, this correlation will show real legs in ’09, as legions of iPhoners, Crackberry Addicts and the like will continue take to mobile search like a longshoreman on a bender (read: heavy consumption punctuated with colorful language) .  We’ve already witnessed both Google and Yahoo fine tuning their mobile search products – albeit in very different ways – and in 2009 we will see the beginnings of a real business emerge in this sector. Watch for the leading engines and agencies make a major mobile plays in ’09, as both will look to the sector to help sustain revenue growth and counter the “leveling off” of the (once interstellar) growth trajectory of “traditional” online paid search and/or SEM – as both (especially the former) begin to show early signs of maturation.
  4. Mobile Video (finally) Gets Interesting.  Along with search, the other interesting affect that comes with increased smartphone penetration is increased consumption of mobile video.  I say “interesting” as in “somewhat viable” or “worth experimenting with”- which should not be interpreted as “it’s going to explode” (or even that I’m reasonably bullish on the channel).  No… while I’ve been a mobile video hater for many years for reasons too numerous to count, we’ll see enough scale in 2009 to merit some testing… as after all, leveraging the moving image remains (arguably) the most effective method by which one can influence consumer behavior.
  5. Apples Grow on Trees… While Android Picks up Steam.  A no brainer that simply cannot be ignored… and the importance of which cannot be overstated.  Most likely, Apple will successfully keep its momentum into ’09 by rolling out popular, yet evolutionary iPhone models (think new colors and modestly increased storage capacity/performance, rather than new form factors or revolutionary new features or price points).  Android will likely see a bigger increase in Mobile OS share (albeit from a smaller base) than Apple, as Samsung (Spring) and Motorola (Fall) roll out hot new handsets utilizing the Open Source mobile OS.  And speaking of Open Source, it will be interesting to see if the (reasonably) open Android starts “out innovating” Apple’s proprietary mobile OS when it comes to features and applications.  As it is we’re still waiting for Google to integrate a working commerce model (safe money is on Google Checkout… duh!)  into the Android Marketplace so that developers will have an easier time charging consumers for applications (expected Spring, 2009) – so it might be awhile before developers truly embrace Android as tightly as they have with the iPhone SDK.  Our prediction:  in 2009 Android will become the “hip incubator” for mobile application and/or OS innovation… with Apple and/or independent iPhone developers skimming the cream and co-opting the most interesting ideas of the bunch.
  6. Biggest Losers of 2008: Motorola, Palm and Sprint Stay Alive.  Notable for their ability to keep breathing, the “Crap Pack” of ’08 will not kick the bucket as so many are predicting.  Sprint will slowly turn the corner in ’09 under Dan Hesse’s steady hand (is it us, or is anyone else getting a “Fred Thompson” vibe from his gently reassuring, speak-directly-into-the-camera series of commercials?), making incremental customer support improvements and leaning on that “Clearwire Thing” to leapfrog ahead in the bandwidth arms race (see “Wi-Max Casts Wide Shadow” below for more on this).  The great recession saved Motorola’s Wireless business, as the venerable Schamburg, Illinois red ink factory likely found no suitable suitors.  Now the company is forced to do what it does best… crank out a hit product to save the company – which we believe we’ll see in the form of a swank Android handset sometime late next year.  Until then Moto will occupy itself by doing the other things it does best: bleeding market share and taking on further debt… which brings us to our last lovable looser, Palm.  The fact that Elevation Partners decided to invest $100MM to keep Palm afloat just last month proves that there’s somebody out there for everybody… no matter how unsightly, aged, infirm or otherwise unappealing.  Seriously, we’re not entirely sure know how much lifespan $100MM buys Palm, but we’re betting 18 months, at best.
  7. Cash Poor Mobile Start-ups Get Snapped Up by Web, Traditional Media Players.  Another obvious one that needed to be said: the credit crunch / recession combo will start claiming casualties among the most vulnerable in the mobile sector, while traditional media giants and other web firms lacking mobile chops go bargain hunting.  Specifically, the time might be right for WPP’s 24/7 RealMedia to formally acquire one of their partner mobile ad networks (such as JumpTap or Millennial), should the opportunity present itself.  On the Cable side both Comcast and Time Warner have already made big bets on wireless with their Clearwire investments… yet neither have much else to leverage here in the form of inventory of other mobile-ready assets. A mobile video acquisition for each of these players on the order of a Rhythm NewMedia or Transpera might just be in the cards.
  8. WiMax Casts Wide Shadow.  While 2008 was all Apple and Google, newly-formed Clearwire (not to be confused with the “old” Clearwire, which had the same management yet different investors – a confusing situation that deserves a dedicated posting of its own) quietly rolled out what we believe to be the first real mobile broadband network in the US… (OK, well in Baltmore, MD – but heck, it’s a start!).  As Clearwire partner Sprint Wireless brings new WiMax hardware to market, and  the high speed service rolls into new markets like Portland and Chicago in 2009, look to Verizon Wireless and AT&T to fall all over themselves to attempt to bring their competitive 4G “LTE” (Long Term Evolution)  product to market by the end of the year.  It’s a moot point if Clearwire ever really rolls out a national WiMax network, or instead (like many are predicting) runs out of cash sometime in 2009 (prediction: cash-laden Clearwire partners Intel and Google will pony up an additional round of investment in the network while cash strapped partners Comcast and Time Warner sit this round out – slowing, but ultimately sustaining, Clearwire’s national rollout) what matters most is that Clearwire and WiMax is giving the industry a huge kick in the pants… and with this we’ll finally get the true mobile broadband experience we’ve all been waiting for.  Cue the brass band!
  9. MMS Gets its Act Together (Just in Time to Become Totally Irrelevant).   It’s no secret that MMS never really caught on with the public… and even when the carriers got their act together in 2006 and brought cross-carrier MMS interoperability online, the bloom was already nearly off the rose, as it were.  Marketing applications remained uber-niche, as lack MMS support for cross-carrier short codes left brands with two, equally unappealing options (e.g. the use of either a ten digit phone number or an email address in the primary Call-to-Action).   Still, while some consumers are giving the “Most Morbid Service” a second chance, the last nail in the coffin may have come from Apple, when it shafted the technology by not supporting it on the iPhone.   Now it seems the CSCA , along with their strong-armed cousin, NeuStar, are working with the US carriers to bring MMS support to intercarrer (common) ShortCodes… which, if achieved, would greatly expand the effectiveness of the channel as a marketing medium.  The question is, will this work be completed before the technology becomes altogether irrelevant?  Perhaps… although no one (including us) is betting on it.
  10. Application “Bubble” Doesn’t Burst… Yet.   A minor one, but just squeaks into our Top 10 (take that, “Privacy Concerns!”).   First, in order to predict that a bubble won’t burst, you need to prove the existance of a bubble.  Case in point: iFart (point proven!).  Now just when will the “App Bubble” burst?  Well, it would seem that in order to “burst”, the bubble would first need to achieve maximum volume, which won’t happen until iPhone and similar “ReallySmartPhones(TM)” achieve critical mass (we’re thinking 15-20% penetration) – and that’s not happening for at least a year or two – even in the rosiest of scenarios.  Still, for all the whooplaa around “+300MM iPhone app downloads in the first six months of app store,” some have acutely pointed out that the iPhone app growth curve has already started to flatten out.  That said… we’re likely to see a whole new crop of iFarts-like hits in 2009 – and needless to say Mobilestance awaits on baited breath.

Well folks… there you have it – our top 10 predictions for 2009.  Feel free to leave a comment if you feel we’ve missed something… or if you just want to throw some gasoline on the fire… and check back with us throughout the year as we continue to chronicle this thing we call Mobile.

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del52.jpgDeloitte is sharing some “interesting” numbers from their new “The State of Media Democracy” survey. Billed as a “‘reality check’ on how American consumers between 13 and 75 years of age are using media and technology today – and what they want in the future,” the study reserves a special section for mobile entitled “Cell Phones as Entertainment” as it breaks down consumption of user-generated, traditional and mobile media across four key generations: Millennials (13 – 24), Gen X (25-41), Baby Boomers (25-41) and Matures (61-75).

Some highlights from the piece:

  • “Cell Phones are Surging as Entertainment Devices.” (Yes I said “Hype” for a reason). 36% of US mobile users surveyed stated that they use their mobile phone for “entertainment” (up from 24% in just six months). The Millennials reported the highest activity in this area, with 62% reporting mobile entertainment usage (up from 46% in six months), with Gen X second at 47% usage (up from 29% in six months). It’s not entirely clear how Deloitte is defining “entertainment” (they don’t define this in their release), but surely cannot be referring to video services, or even downloadable music – as these numbers are seriously at odds with nearly most (if not all) major research data covering this market. Perhaps “Entertainment” is referring to gaming, video, music, and “entertainment-related” mobile web usage. Question: If I’m talking on my mobile and my friend tells me a joke, does that count as “Cell Phone Entertainment?”
  • Both Millennials and Gen X’ers display nearly identically activity in mobile internet usage, at 45% and 46%, respectively. Again, these numbers seem very high when viewed against similar studies and other industry data from “mobile specialist” research firms like M:Metrics and Nielsen Mobile (Telephia)
  • Mobile “picture taking” on the rise. 63% of mobile users reported using a mobile phones for photo capture; 80% of Millenials and 75% of Gen X. These numbers seem somewhat elevated but in general seem realistic and corroborated by similar studies and marketplace observations.

Overall, I must say that I am extremely skeptical of Deloitte’s latest findings, an opinion shared by others in the US mobile marketing space. Both Carlo Longino of mocoNews and Steve Smith of MediaPost cast similar doubt on the validity of some of the numbers reported in the survey, primarily concerning the dubious claims concerning US mobile video penetration (20%? – is that a typo?!). Ultimately, the fact that the Deloitte survey promotes data consistently and significantly above earlier findings would suggest a overenthusiastic (to use a nice word) research bias, and whether intentional or not – unfortunately puts all of its findings into doubt.

According to Mobile Marketer, a daily mobile marketing industry newsletter that started appearing in my inbox yesterday and that claims to be “the news leader in mobile marketing, media and commerce,” there was a 22 percent increase “in the number of consumers who received SMS text ads in the United States”, (3Q Year of Year) garnering “an 11 percent response rate.”Mobile Marketer cites M:Metrics as a source, although I found no mention of the third quarter data among its public releases.

Giving Mobile Marketer the benefit of the doubt (which may be a bit of a stretch considering the publication’s first issue featured a self-serving column written by an email services firm that felt more like a sales pitch than an “opinion” piece), I have some difficulty with the overall concept of “SMS Advertising.”SMS is by definition a “pull” marketing channel, meaning that all SMS engagements are user-initiated. If, after the initial engagement, the user receives a marketing message contained within a response message, I would hardly classify that as “advertising.” By most accounts an “Advertising” message would involve some sort of “public broadcast” to a large group of people. If I had to classify this type of marketing, it would probably fall somewhere between Direct Response, Sponsorship or even CRM (if there’s ongoing messaging activity to a list of mobile “opt-ins”).

Why split hairs? Well, for one thing, its important for the Mobile Marketing industry as a whole to get behind a set of standards and terms that are easily understood by the overall marketing community at large. By incorrectly calling this type of activity “advertising,” clients are getting misaligned perceptions about the medium and its uses, incorrectly thinking that they can “blast out a SMS message to the public,” advertising-style.

Interestingly enough, there are some genuine SMS Advertising campaigns going on in the US market. Who, you ask, would have the nerve to ignore MMA best practices and blast out SMS messages without first getting permission to do so? That would be the only group with no fear of the carriers coming in and shutting them down… The carriers themselves! That’s right, “operators are the main source of SMS ads,” states Mark Burk of M:Metrics.

I think we can all agree that unsolicited SMS ads are not the future of mobile marketing. That said, if we are to speak of “Mobile Advertising,” lets be careful of what exactly we are talking about. There are many legimate forms of mobile advertising, from mobile web banners, to mobile video spots, and even in-game ad units. All are legitimate advertising channels because the user has accepted these mediums as ad-supported, and while consumers certainly don’t welcome (most) ads with open arms, they put up with them so long as they don’t dominate the experience.

The same cannot truly be said for mobile messaging.

From the “next big thing” file, the latest in mobile’s long tradition of incredulous, industry-promoting “research studies” comes from Screen Digest, who conclude that there will be over 28 million mobile video subscribers in North America by 2011. That’s right folks… in a scant three years mobile video is expected to increase by a factor of 20! Never mind that recent surveys have demonstrated that US consumers have little interest in mobile video, or that m:metrics has shown that only 0.6 percent of US mobile subscribers are currently utilizing mobile video services.

The Screen Digest press release makes little mention of research methodology, other than that “The data in this press release is taken from Screen Digest’s latest report, Mobile TV: Business Models and Opportunities. The report includes analysis of the current market situation, business models and value chain, as well as analysis of the delivery mechanisms, broadcast technology and the impact of regulation. 25 countries are reviewed in the report.”

More than likely Screen Digest’s release and corresponding “report” are designed to fuel the speculative bubble that has enveloped the mobile space for the better part of the last decade, giving the pitchmen another bullet point in their case for the “huge, can’t miss opportunity” that is mobile video.

Too bad, really… as it’s “research” like this that has continued to misalign expectation of the channel, and usually only serves to thwart the efforts of legitimate mobile marketers in the space.